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Renault’s Sensational Case of Stolen Secrets Is Dissolving for Lack of Proof

March 16, 2011

The New York Times, 10 March 2011: The New Yorkt Times, The extraordinary charges shook the French business establishment: Renault, the automaker, said in January that three of its employees had been caught trying to sell its electric car secrets overseas. So confident was the company of its case that it fired the three and filed criminal charges. Carlos Ghosn, the chief executive, went on television saying he had seen proof of the men’s guilt.

But the affair appears to have turned from the sensational to the farcical — and now threatens to become a corporate tragedy. Renault is reconsidering its accusations amid doubts about crucial evidence, creating a possibility that heads will roll amid deep embarrassment in the French establishment.

Like BP, which found its corporate image damaged by the Gulf of Mexico oil spill last year, Renault may soon be looking for new people for its executive suite. Finance Minister Christine Lagarde of France has pointedly called on management to “take all the consequences” in the case.

The investigation is not over yet, and new evidence could still turn up to implicate the men. But Renault no longer talks of certainty. Patrick Pélata, the chief operating officer, on Wednesday told the French daily Le Figaro that “a certain number of factors lead us to doubt” the previous assertions.

At issue is the evidence on which the charges rest. The Swiss and Liechtenstein bank accounts the men were alleged to have created to channel the wages of spying have not been found, even though a secret source had supposedly provided detailed information.

Adding to the mystery, Renault’s own security officials, who — with the aid of a contact in Algeria — carried out the company’s internal investigation after the men were anonymously denounced, have refused to divulge to either French intelligence or the company their source for the account data.

Le Canard Enchaîné, a weekly French publication, reported Wednesday that the company had paid that source 250,000 euros ($345,000) for the initial information, a fact confirmed by the company. Renault said it did not know whom the funds were intended for.

Jean Reinhart, a Renault lawyer, said Wednesday on France Inter radio that he expected the investigation to conclude by the end of March.

Xavier Thouvenin, a lawyer for one of the accused men, said the latest revelations suggested that Renault had fallen for a con artist who played on the company’s fears. “Whoever was behind it got a little greedy,” Mr. Thouvenin said. “He went after three guys who didn’t just lie down. They said, ‘We’re going to fight this till the end; we’re innocent.’ ”

He added: “Now Renault is claiming they’re the victim, but they’re also basically saying they never had any documents, no evidence. They had nothing. Can you imagine firing someone for something like this and not even checking?”

Renault filed a criminal complaint for “organized industrial espionage, corruption, breach of trust, theft and concealment.” At the time, a member of the French Parliament spoke of a “Chinese lead” in the case — drawing a chilly response from Beijing — and called for stronger measures to protect national corporate secrets.

The espionage was supposedly aimed at the company’s electric car program, an area where Renault and its Japanese ally, Nissan Motor, are seeking to establish themselves as the global leader.

But there were signs of problems with the case. To begin with, French government officials, who have a major voice in the company because the state still owns 15 percent of its shares, were furious that Renault had not alerted them or the domestic intelligence service to the case until the automaker had already suspended the three men on Jan. 3. Further, intelligence officials expressed doubt that Renault had the resources at its disposal to investigate in just a few months the complex web of international money transfers through offshore financial centers that it claimed to have discovered.

And all of the men strongly maintained their innocence, taking their case to the media and filing defamation suits against the unknown party that had accused them. The three are Michel Balthazard, a member of the management committee and a veteran of more than 30 years with Renault; Bertrand Rochette, Mr. Balthazard’s assistant; and Matthieu Tenenbaum, a former deputy director of the electric car program.

Mr. Pélata, No. 2 behind Mr. Ghosn, said during an interview last week with Le Figaro that he would resign if the accusations proved to be false. But Mr. Ghosn’s position could also be in jeopardy. Though he is one of the few chief executives of a French company with worldwide name recognition, he is also among the highest paid, and the French government has not been completely happy with what it sees as Mr. Ghosn’s emphasis on producing overseas.

Caroline de Gézelle, a company spokeswoman, said neither Mr. Ghosn nor Mr. Pélata was currently available for interviews. “We’re waiting for the prosecutor to conclude his investigation,” she said. “Justice will be done. If indeed these people are innocent, the company could offer them to be reintegrated. It is too soon to say; there are a lot of possibilities that need to be discussed.”

Mr. Tenenbaum said during an interview in January that he wanted nothing more than to return to his job at Renault.

But Mr. Balthazard told Le Figaro this week that the experience had been “horrible.”

“I saw from this affair the total lack of confidence management had in me,” Mr. Balthazard added. “And to go back to a place where people all wrote me off as guilty is simply unimaginable. There’s no going back to Renault.”

 

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